Financial Crime World

Strengthening Customer Verification Protocols for Financial Institutions in Vanuatu

The Reserve Bank of Vanuatu has issued new guidelines aimed at strengthening customer verification protocols for financial institutions operating in the country. The Prudential Guideline No. 9: Financial Institutions requires financial institutions to verify the identity of their customers and take measures to prevent money laundering and terrorist financing.

Key Requirements

  • Verify Customer Identity Through Due Diligence Process
    • Financial institutions must ensure that they have a sound due diligence process in place to identify and verify the identity of customers.
  • Professional Intermediaries Subject to Same Regulations
    • Professional intermediaries must be subject to the same regulatory and money laundering legislation and procedures as the financial institution.
  • Gathering Information for Politically Exposed Persons (PEPs)
    • Financial institutions must gather sufficient information from new customers and check publicly available information to establish whether or not the customer is a PEP.
    • Investigate Source of Funds Before Accepting PEP
      • Financial institutions must investigate the source of funds before accepting a PEP and make the decision to open an account for a PEP at a senior management level.

Importance of Customer Verification

The guideline emphasizes the importance of financial institutions being aware of their customers’ identity and activities, particularly in relation to business relationships with individuals holding important public positions. Accepting and managing funds from corrupt PEPs can severely damage a financial institution’s reputation and undermine public confidence in the ethical standards of Vanuatu’s financial system.

Commitment to Safe and Sound Operations

“We are committed to ensuring that our financial institutions operate in a safe and sound manner, and this guideline is an essential step towards achieving that goal,” said [Name], Governor of the Reserve Bank of Vanuatu. “We expect all financial institutions to comply with these guidelines and take steps to strengthen their customer verification protocols.”

Effective Date

The guideline comes into effect on January 30, 2015, and applies to all financial institutions operating in Vanuatu.

By implementing these guidelines, financial institutions can ensure that they are operating in a safe and sound manner, while also maintaining public confidence in the ethical standards of Vanuatu’s financial system.